Insurance
is the method of Risk Transfer whereby a group of entities
collectively distribute and contribute towards safeguarding an
Individual against their Financial / Monetary Risks.

INSURANCE & RISKS

The
various types of Risks which an individual or the company has to manage
are listed below. These Risks are covered by several plans and schemes
by Life & General Insurance Companies.

Life
insurance protects or tries to manage the Financial Loss suffered by
the Family Members in case of Premature Death of the Earning Member of
the Family.

Life
Insurance needs of a family can be calculated by several methods like
Income Replacement Method or Need Based Method, but the main objective
that an individual should look at achieving while taking Life Insurance
is that the needs of the dependent family members are met to the
fullest.

There are several types of Life insurance policies that are currently available in our markets like,

Term Insurance

Money Back Insurance

Whole Life Policies

Monthly Income Plans

& Unit Linked Plans.

Unit-Linked Insurance Plans (ULIPs)A unit-linked insurance plan (ULIP) is a systematic investment plan
that offers both insurance and investment returns. In addition, ULIPs
also offer the policy holder the chance of continuously monitoring,
planning, and directing the protection and savings aspects of his policy
according to his needs at any point of time. Thus, a ULIP policy is an
excellent opportunity for the policy holder to optimise his insurance
and investment plan at different stages of his life.

While investing in a ULIP policy, the prospective buyer needs to consider the
various charges that will be applicable on the policy, the fund
management options offered, and the flexibility features they allow. It
is also important to determine the reputation and performance of the
products of the company from whom you are buying the policy.

ULIPs are appropriate for people who have basic knowledge of the equity
market. A prospective policy buyer would need to research the market. He
would also need to understand the features offered by the different
policies and their application to his individual needs. Once he buys the
policy, he would need to adequately monitor its performance to be able
to mould it to his advantage. Those who are not conversant with the
financial markets may need to work closely with a consultant to optimise
their gain from a ULIP policy.

Child InsuranceChild-specific insurance policies offer a savings plan for parents.
They pay returns that are specifically catered to helping the child when
he grows up in terms of paying for their education, marriage, etc.

Child
insurance policies are broadly of two types. In one, the child is
insured and receives a lump sum amount upon his becoming an adult. In
the event of the unfortunate death of the child, the nominee would
receive the premium along with interest.

In the other type,
the parent is insured. The child gets the returns either upon the death
of the parent or upon the maturity of the policy. Parents should
consider their financial status and the future needs of their child
while opting for child insurance.